.png)
Dear Sir/Madam,
I have a query with a brand new fund that I am auditing and would be grateful for some assistance.
The facts are as follows:
New SMSF set up in March 2023 with a corporate trustee with Mum and Dad as directors and shareholders. The members of the SMSF are Mum only, and 2 minor kids, aged 13 and 16 respectively
Mum rolled her balance from her public listed fund to the SMSF, 250k
The kids had 330k each contributed on their behalf as non concessional by mum
The family inherited over $2m from the estate of mum’s father and have since, paid off all debts, established 2 testamentary trusts for the kids mentioned above with 500k in each respectively, and created the SMSF and made the above NCC contributions.
I have a statement of advice from their financial planner outlining all the pro’s and con’s of the above mentioned strategic moves. However, as this case is out of the ordinary, as access to the SMSF funds will not be until after year 2067 based on preservation age of 60, I feel like a bit of guidance and assistance is required to properly audit this fund and if any contraventions(if any) has/will or may eventuate.
We have the following but is it sufficient documentation:1) Consent to act as trustee declaration signed (in relation to acting as trustee on behalf of the child). 2) Section 104A "ATO" trustee declaration.
Thank you very much
john
Hello John.
Thanks for your question.
Whilst it is not common for a minor to be a member of an SMSF, it is certainly possible.
Section 17A(3) of the SIS Act contemplates that a parent of a minor that is a member of an SMSF being a trustee (or director of the corporate trustee) on behalf of the minor member.
Care should be taken to ensure that within 6 months of a minor member attaining the age of 18 that they become a trustee (or director of the corporate trustee) so as to ensure compliance with section 17A(4).
The documentation you have referred to (consent to act as trustee declaration and section 104A declaration are sufficient in relation to the parent acting as a trustee on behalf of the minor members of the fund).
Upon turning 18 and becoming trustees, the former minors will also have to sign the appropriate consents and declarations.